Speculation about JB Were

A report in Australia is suggesting that JB Were and investment bank Goldman Sachs are in merger talks.

As could be expected JB Were have no comment to make on the report which appeared in the Sydney Morning Herald.

The deal, if it exists is considered a good fit because JB Were would strengthen its research capabilities on overseas stocks and would be able to expand its merger and acquisitions operations.

Goldman Sachs on the other hand has a substantial institutional broking desk in Australia but lacks the distribution.

In many ways the fit between the two firms is similar to the reasons why NZ First Securities and NZ First Capital got back together recently.

The Sydney Morning Herald says that Burns Philp's raid on Australasian food giant Goodman Fielder, is one of the reasons talks between JB Were and Goldman Sachs have accelerated.

Credit Suisse First Boston is handling the deal on three levels. Its equity desk handled the raid where Burns Philp grabbed the first 14.9% in Goodman Fielder.

CSFB's investment bank is providing corporate advice and helping bankroll the deal.

Burns Philp says its adviser-broker is lead financier of a syndicate which is underwriting the full cost of the proposed takeover and may do so in the context of capital restructure.